I REALLY don't understand how schools determine federal loan amounts

<p>Does anyone know how financial aid officers determine how much of a Stafford Loan or Perkins Loan to give to a particular student? Why are some colleges apparently so tight with the federal money? Why would they recommend Plus loans and private loans, if they haven't "maxed" the amount of federal loan for which the student may be eligible?</p>

<p>Are colleges given oversight over a certain few million dollars of possible federal loan money and then they have to divey it up to their potential recipient pool? Do they run out? Aren't federal loans determined by and limited by the student's EFC and year in school? </p>

<p>Here's an example - let's say, a student has $10,000 of unmet need<br>
one school might offer
$4,500 Stafford Subsidized
$1,000 Perkins
$1,500 Work Study
$3,000 Unsubsidized</p>

<p>and then another even more expensive school offers
$3,000 Subsidized Thats it. End of story.
you call - they say...get a plus loan or private loan. </p>

<p>I've read other listings from students who were offered
$1,000 Subsidized</p>

<p>the student's comment..."are they SERIOUS?????"" because they know they have a real small EFC. </p>

<p>I don't get the system AT ALL.</p>

<p>bump</p>

<p>I'm still working on trying to understand the discrepancies - - this is what I found so far. </p>

<p>I found one school – USC – that very openly explains its financial award packaging process.
<a href="http://www.sc.edu/financialaid/awdprcss.html%5B/url%5D"&gt;http://www.sc.edu/financialaid/awdprcss.html&lt;/a&gt;&lt;/p>

<p>It does seem that schools only have limited funds to administer for example - for Perkins Loans - from Louisiana State
<a href="http://www.lsu.edu/financialaid/finaidawardprocess.htm%5B/url%5D"&gt;http://www.lsu.edu/financialaid/finaidawardprocess.htm&lt;/a&gt;&lt;/p>

<p>Evidently not all Stafford Subsidized Loans are the same. Some ‘called direct’ come directly from the school. So <strong>maybe</strong> this might explain how a school might ‘run out of’ Federal Loan money or offer less than what a student is entitled to per Title IV rules in an attempt to spread around the money.</p>

<p>quoated from the web site below...
—These loans may be made by private lenders
and guaranteed by the federal government (guaranteed loans) or made
directly by the federal government through a student’s school (direct
loans).<br>
<a href="http://www.gao.gov/new.items/d05105.pdf%5B/url%5D"&gt;http://www.gao.gov/new.items/d05105.pdf&lt;/a&gt;&lt;/p>

<p>One cannot look at individual award packages and point out discrepanies. Each individuals circumstances can vary depending on overall financial aid package, EFC, Cost of Attendance, etc. One also must look at grade level and dependency status. Also, a parent PLUS loan denial can change the way a financial aid package looks. In order to accurately compare packages, you have to have all the pieces to the puzzle and modify the results to equalize all factors as closely as possible. For example, an institution which costs merely $7000.00 a year would produce a minimal financial aid package because the COA is rather low. An institution which costs $26000.00 would produce a much larger package.</p>

<p>Comparing FA packages isn't as simple as one would seem within this forum as you don't always get the complete picture.</p>

<p>One thing to keep in mind is that the total award cannot exceed the COA (cost of attendance). So -- as far as Stafford loans, they will only award the amount that is needed to meet the demonstrated need after EFC, Scholarships (including outside $) and other amounts granted.</p>

<p>You are correct, Perkins loan money is limited and the school may determine how it is distributed.</p>

<p>also -- Stafford loans and Perkins loans and work-study cannot be used toward the EFC, so when you are calculating money needed the family pays the EFC and the student takes out the loans.</p>

<p>Thank you NikkilL & hsmomstef... can't campare different student's FA packages, not even for the same school. </p>

<p>The example I gave for the first two above is our own - same EFC, different schools. Both schools knew that we had a Plus loan denied. The most Federal loans (the $10,000) was offerecd by a school with about a moderate COA, and along with need based grant, represented 100% need. The lesser amount, $3,000 was for a school with a an even higher COA, and along with a small grant, represented approx. 44% need. </p>

<p>The first school, which offered us the maximum load of grants for a sophmore, also is listed by college board for meeting 97% of need.</p>

<p>The second school, which offered the very limited federal loans, is listed by collegeboard as meeting only 54% of need.</p>

<p>I guess I just assumed that when a school can only meet 50% of need, that the gap was caused by
the student is not academically strong enough to qualify for merit aid
the school doesn't have enough need based grant money, and the need based grant money goes to the strongest students first, then runs out
then they max out the possible federal loans the student might qualify for
whats left - is the gap </p>

<p>I've just been trying to understand why, even if the student doesn't qualify at that particular school for large grant aid, why they wouldn't still be entitled to a more maximal offer of federal loan money, which would decrease the amount of the student's or parents more more costly alternative/private loans to fill the 'gap' up to the EFC amount ( I'm a believer in doing my parental part at paying the EFC ).</p>

<p>oops, I meant "the first schol , offered the maximum load of federal LOANS for a sophmore..."</p>

<p>ahoo:</p>

<p>For help with federally-subsidized student aid, check out the fed rules: </p>

<p><a href="http://studentaid.ed.gov/PORTALSWebApp/students/english/index.jsp%5B/url%5D"&gt;http://studentaid.ed.gov/PORTALSWebApp/students/english/index.jsp&lt;/a&gt;&lt;/p>

<p>Thank you everyone - what a revelation</p>

<p>It seems the rules define quite abit about the eligibility, status determination and maximum amounts of federal financial aid able to be borrowed by students. </p>

<p>It also seems that a particular school is under no obligation what so ever to offer or allocate the full amount (or any amount at all) of federal aid/loan to a particular student. </p>

<p>That is a lot of power.</p>

<p>We must certainly trust the integrity of each school's financial aid packaging policies. And I'm sure most schools are doing their very best to help students. </p>

<p>What is there to prevent a financial aid programs from being biased in their assignment/allocation of federally funded student aid towards students with greater desirability (honors/athletes) and/or against students with greater disadvantage (less that honors grades, EFC closer to 0). </p>

<p>I don’t think Federal Financial Aid should be used the same as a college merit aid in recruitment and retention of students.</p>

<p>ahoo:</p>

<p>it is in EVERY school's best interest to dole out as much federal largesse as it can, before their own money.</p>

<p>this may be a little off key...but who are financial aid counselors accountable to?</p>

<p>i federal aid given to honor students and athletics first?</p>

<p>whose to say?</p>

<p>federal aid is given to ALL who qualify, so yes, athletic recruits are eligible for federal aid, particularly Pell Grant money since its "free" to the college/athlectic dept.</p>

<p>Kyra,</p>

<p>Financial Aid Counselors are accountable to the Department of Education. We are held to a strict code of ethics which can result in severe penalties for deliberate violations of the regulations, which can include a $20,000 personal fine (that must be paid out of our own pocket) and/or prison time.</p>

<p>thanks Nikkiil,</p>

<p>I was wondering because there are so many options of aid and the job of determing who gets what. But, thank you.</p>

<p>I used to work in financial aid (many years ago). You have NO IDEA how many regulations financial aid people must know & follow! I can't imagine any financial aid officer would award aid in violation of federal guidelines. The fines (institutional & personal) are very stiff. Financial aid is confusing, I agree, but I would be surprised to find a school awarding aid in a way that favors certain people (athletes or whatever). Schools have to award federal aid within federal guidelines, although there is enough latitude within those guidelines that school A may seem to award differently than school B. For example, in my day the feds gave our school SEOG money. We had rules to follow, but we could make our own formula for distribution. But policies within a particular school are enforced for all students equally (the star athlete with less need would not get the money before the nonathletes with higher need). Institutional funds can be doled out however they want to dole them out, though --- and missing the preferred filing date can mean not getting aid you might have gotten otherwise. Actually, that can happen with some federal money, too --- if the school has a limited amount of federal grant money to award, those who file past a certain date might miss out.</p>

<p>I made making a direct request for the full $4500 Sub.Stafford for sophmore and $4000 Unsub and requested if she was denied - to please tell us why. </p>

<p>The amounts were added to her FA package the next day.</p>